The Euro and British Pound recovered slightly overnight after another +100 pips down day. EUR/USD reached a low of 1.0638 and while there is minor tech support at 1.0610 and 1.0550, a test of the current 2015 low at 1.0460 seems imminent. GBP/USD is just 80 pips away from the yearly low at 1.4632. Traders are now waiting for the UK Industrial & Manufacturing Production data at 0930 local time and a bad print could push the pair towards the aforementioned support level. Meanwhile, EUR/GBP bounced off the 0.7220 support level, but is struggling to make further gains. Given the weakness of both currencies, further consolidation seems likely.

USD/JPY extended gains overnight, supported by broad USD strength and rising equities. Next major resistance eyed at 121.20 and then 122.00. AUD and NZD remain well bid overall, but there has not been a lot of activity in the pairs given the lack of data from those countries this week.

Looking ahead, the focus in the European session will be on the UK data. Later in the day, we’ll get Canadian employment data and Fed’s Kocherlakota will be speaking.

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